Leave No Stone Left Unturned
In these challenging economic times, we as business owners must carefully scrutinize all expenditures. Let’s face it – we should be doing this in any economy, but we got a little fat and happy while allowing the “urgent” to take priority over the “important”. Well, now cutting costs, operating our businesses as lean as possible is both – urgent and extremely important!
So, I began the process of examining how we spend (possibly waste) money within my organization by requesting an accounts payable report from my account department. An obvious first step, but how many of us have ever examined exactly who we pay and how much. Simultaneously, I did the same exercise with my personal expenditures. Then I generated a list of questions about my vendors. “When does our contract end with our document storage company and what do we have there anyway? What are the terms of our commercial lease and when do I think I can renegotiate it?” It seems like nickels and dimes, but they all add up to savings. Then I went to my forum members within the Entrepreneur Organization (EO) for help with the big ticket items. After all, these are like minded CEO’s with a whole host of expertise. Like many companies, communications (T-1 lines, company cell phones, PBX systems, long distance service, etc.) was a relatively large expenditure for us. So, one of my fellow business leaders with a specialty in this area offered to audit our communications spending. Within a week I received a detailed check list of the changes I needed to make to save approximately 40% in this one area. Now, I have a plan and the opportunity to save provides all the incentive I need to make sure this plan is put into action. Commercial insurance was another larger expenditure. So, I shopped around for better rates and alerted my current provider that I was doing so. I was able to recognize a $10,000 savings and stay with the same coverage and the same provider. After reviewing each line item I made several changes to how our company spends money by simply paying our Federal Express bill using a corporate American Express to save an extra 5%, and looking for discounts with vendors we already use. The final step in my corporate payables reduction plan was to go through our entire vendor list and call our current vendors and simply ask for a better rate. Many offered to cut our costs in half in lieu of losing our business!
My only question is what took me so long? So, we learn these lessons now and make the changes – regardless how small. The real test is whether we retain these good practices in a healthier economy. We all know our companies would be healthier for it. In hide sight, I didn’t create miracles. I certainly didn’t turn water into wine! But, the positive impact on my bottom line tastes so sweet!
Sunday, May 10, 2009 at 5:16PM
Reader Comments (1)
I personally don't know your internal company structure, did you change your telecommunications from a physical T-1 to a virtual PBX (voice over IP)?
I saved a non profit I'm a board member of by simply doing that, and it's amazing no long distance charges, and the phone numbers can be routed anywhere in the US.
I also looked at the liveops.com model and have saved by tele-communting paraprofessionals too.
Vision to Empower
Robert Tracy
www.aniz.org
ps. How are you saving on cell phone charges?